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Gold/Mining/Energy : American International Petroleum Corp -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (4077)	10/25/1997 2:43:00 PM
From: faris bouhafa	Read Replies (2) \| Respond to of 11888

I thought it would be of some value to re-post this past article from the Wall Street Journal that lmw referenced in an earlier post: Texaco, Mobil Expect Deals With Kazakstan in November By HUGH POPE Staff Reporter of THE WALL STREET JOURNAL ALMATY, Kazakstan -- Texaco Inc. and Mobil Corp. hope to sign multibillion dollar production-sharing agreements with the oil-rich Central Asian republic of Kazakstan during President Nursultan Nazarbayer's visit to Washington in mid-November, Kazak officials and oil executives say. Texaco International Petroleum Co. expects to move forward with its 20% share in the $6 billion development of the giant Karachaganak gas field with British Gas, Italy's Agip and a Russian company. Mobil Oil Kazakhstan Inc. expects its one-sixth share to be formalized in an international consortium's choice oil prospects in the Kazak sector of the Caspian Sea. Progress on the long-planned deals underscores how hopes are rising that this vast Central Asian country will emerge as a major source of energy in the next century. A former Soviet republic that is five times the size of France, Kazakstan has about half of the region's estimated 100 billion to 200 billion barrels of potential oil reserves. The signing of pacts such as Texaco's and Mobil's could trigger additional investment programs, in spite of a great hurdle confronting the oil industry here: the lack of a major route to export oil across the many national borders of the land-locked Central Asian steppe. "I think what we are seeing is a growing interest in Central Asia after so many oil deals in Russia have fallen by the wayside," said an American oil executive attending the fifth Kazakstan International Oil and Gas Exhibition, which attracted hundreds of U.S. and other participants to this Kazak capital. Talks Next Week Baltabec Kuandykov, president of the government oil-development company known as Kazakhstan-kaspishelf, said a last round of talks here next week would attract all six companies who paid equal shares of $300 million needed to conduct a 38,600-square-mile scismic survey of the northeast sector of the Caspian Sea-Royal Dutch/Shell, Mobil, Total, Agip, British Gas, and an alliance of British Petroleum and Norway's Statoil. Both Mr. Kuandykov and Mobil executives expected the signing of a production-sharing agreement in Washington, where similar oil deals with Azerbaijan were signed this summer, in a sign of U.S. interest in the region. Agreement on the production-sharing pact will allow preparations to go ahead to drill a first test well in Caspian Sea waters less than 30 feet deep. Quick action is needed in order to prepare for the brief summer-time window of opportunity for such work. Kazak winters freeze the surface of the Caspian for more than four months a year, and winds can drive ice drifts into stacks up to 45 feet high. In Texaco's Karachaganak deal, a question mark remains over who will take a 15% share that has been set aside for participation by a Russian company. The field is on the Kazak-Russian border and relies on export routes through Russia. But executives appeared confident that this uncertainty wouldn't prevent the signing of the key production-sharing agreement, and that Kazakstan would overcome confusion caused by shake-ups at its oil-sector institutions this year. Outbid by China The biggest American interest in Kazakstan is the $20 billion development of the giant Tengiz oil field, where Chevron Corp. holds a 45% stake and Mobil has a 25% share. Amoco Corp. and Unocal Corp. were disappointed to be outbid for the big Uzen oil field this summer by China National Petroleum Co., one of a spate of recent coups here by Asian companies. But oil executives say Amoco and Unocal are in talks on other projects. Smaller American companies, including First International Oil Corp. of Houston, have also quietly swept up large acreages of obscure prospects and say they are doing well. "A new chapter of growth has just begun," said Richard Matzke, president of Chevron Overseas Petroleum Inc. He predicted that Tengiz production would exceed seven million tons of petroleum this year after five million tons in 1996. "Many critics said it would fail, being an investment so soon after the Soviet breakup. Now it is the premier energy venture in the former Soviet Union." Exports from Tengiz have so far moved by an ingenious mix of pipelines, barges and trucks. But the industry expects the big Caspian Pipeline Consortium pipeline to the Black Sea will be ready by the year 2000. That expectation has triggered $1 billion of further investment in the Tengiz project, which has already absorbed nearly $1 billion, Mr. Matzke said.